STATE LEGISLATIVE INSIGHTS

By Lauren Brinjac, IA&B Government Affairs Director

IA&B has a government affairs team that lobbies in each of our three states, maintaining a consistent presence in Harrisburg, Annapolis, and Dover. The team meets regularly with state legislators and state regulators in all three state capitals to advocate on the issues important to independent agents and brokers.

This year, however, with all three state legislatures in session at the same time for the first time since the March 2020 COVID-19 related shutdowns began, has been a year like no other. Just as the pandemic has affected almost every aspect of our lives, so, too, has it affected both the physical operation of the state legislatures as well as their legislative agendas. Although each state legislature has handled things differently, much – and in some cases, all – legislative activity has taken place virtually, and the capitol buildings in each state were closed to the public, including lobbyists, for months.

Your IA&B government affairs team remained fully engaged with state lawmakers and regulators regardless, and although COVID-related issues were certainly a chief concern to legislators this year, there were numerous insurance issues addressed in each state. The following is a summary of some of the legislative initiatives of interest to IA&B members which were considered by lawmakers this year:

PENNSYLVANIA

While the state legislatures in Maryland and Delaware halted their activity abruptly in the spring of 2020, the Pennsylvania legislature continued to meet intermittently. The 2021-2022 session of the Pennsylvania General Assembly convened on Jan. 5, 2021. On June 25, both the state House and Senate adjourned for the summer after passing the state budget package, and as of this writing, will return to session in September.

OVERTIME RULE

Pennsylvania General Assembly leaders and Gov. Tom Wolf came to an agreement, as part of the state budget package, to repeal the state’s new overtime regulation which IA&B member agencies would have needed to implement starting this fall.

IA&B, along with a coalition of business groups across the state, provided verbal and written comments on the state’s revised overtime regulation to both lawmakers and regulators throughout the regulatory process. We expressed concerns with the lack of uniformity with the federal overtime rule – driven by the Fair Labor Standards Act (FLSA) – forcing agencies to comply with different sets of complex rules.

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IA&B, in June, participated in a public hearing of the Senate Banking & Insurance Committee in support of Senate Bill 676, sponsored by Senator Joe Pittman (R-Indiana), which would eliminate stacking and remove the restriction on UM/UIM limits. IA&B testified before committee members in support of the legislation, explaining that it would simplify auto insurance for both consumers and agents. During our testimony, we made sure also to address our long-time legislative priority, raising the current minimum limits, which are the second lowest liability limits (15/30/5) in the country and haven’t been touched in over 40 years. It is our goal to have legislators to address both stacking and increased limits in the same piece of legislation.

ANTI-INDEMNIFICATION

House Bill 424, a bi-partisan bill sponsored by Reps. Mike Driscoll (D-Philadelphia) and Todd Stephens (R-Montgomery), deals with indemnification provisions in construction contracts. Currently, 45 states have enacted some form of anti-indemnity statute limiting the enforceability of various forms of indemnity clauses in construction contracts; however, Pennsylvania has not. This means that subcontractors often must unfairly accept the liability for an owner’s or general contractor’s negligence in order to enter into a construction contract. HB 424 would change this by prohibiting broad and intermediate forms of indemnification. This legislation, supported by IA&B, was voted favorably out of the House Commerce Committee in June, and we continue to lobby to have the full House pass this bill in the fall.

HB 765, sponsored by Rep. Brett Miller (R-Lancaster), addresses a situation involving PennDOT and community events. PennDOT recently began requiring localities (in addition to event sponsors) to indemnify the state for parades and events on state roads, thus giving PennDOT duplicative liability coverage and creating an issue for municipalities. Although that has been required via regulation for years, PennDOT did not begin enforcing it until last fall. To address this, HB 765 removes the liability insurance requirement for the municipalities. This bill was passed by the House and Senate, and signed into law in June. It took effect immediately.

WORKERS’ COMPENSATION

SB 147, sponsored by Sen. Wayne Langerholic (R-Cambria), amends the Workers Compensation Act to require that employers who have a certified safety committee as part of their workers’ compensation program include “information regarding the risks associated with substance abuse, including opioid painkiller use.” It leaves the specific certification criteria up to the Department of Labor & Industry to develop and to make resources available for employers to use within 21 days of the bill being signed into law. SB 147 was passed by the Senate and House and signed into law on June 30. It takes effect Oct. 28, 2021.

MARYLAND

Contributions by Bryson Popham, IA&B of Maryland Lobbyist

The Maryland General Assembly adjourned its 90-day annual legislative session this year on April 12. They will convene again in Annapolis on Jan. 12, 2022.

HB 221 – MOTOR VEHICLE INSURANCE - USE OF CREDIT HISTORY IN RATING POLICIES

The most prominent property and casualty issue of 2021 was the effort to ban the use of credit in automobile insurance rating. This found its way into several different bills, one of which was HB 221.

IA&B supported the statutory restrictions that were first placed on the use of credit in 2002. We have consistently advised the legislature that the Maryland law has greater consumer protections regarding the use of credit than are found in the great majority of other states. We have consistently opposed efforts to further restrict or ban the use of credit.

Why? The reason is simple: in 2002 we knew that eliminating credit would only result in higher automobile insurance rates for two-thirds of the private passenger auto insurance market. The math in 2021 is even more compelling, as proven by both regulatory and industry studies. Today, the use of credit results in lower rates for over three-quarters of private passenger auto insureds. For these reasons we strongly opposed HB 221 as introduced.

Times are different in other important ways as well. Today, a strong movement toward social justice goals, evidenced by police reform legislation in Maryland and elsewhere, also found its way into automobile insurance. Opponents of credit scoring characterized it as a proxy for racial discrimination. This was a powerful argument – one that IA&B had to address head on with the Chairman of the House Economic Matters Committee during the bill hearing.

Although credit scoring bans have consistently been defeated in the Maryland legislature, this year was different. As a price for retaining the use of credit, HB 221 was amended to require insurers, under certain circumstances, to consider “extraordinary life circumstances” in applying credit-based rating factors to an automobile insurance policy. An example of one such factor could be a credit score that has worsened due to outstanding medical bills or loss of employment. The industry accepted these amendments and the bill was passed by the House of Delegates. It did not survive, however, in the Senate, and it is noteworthy that the consumer advocates who vehemently opposed the use of credit also opposed the amended form of HB 221. We are certain to deal with this issue again.

SB 962 REAL PROPERTY – SATISFACTION OF A MORTGAGE – REQUIRED HOMEOWNER’S INSURANCE (CASSIDY’S LAW)

This bill resulted from a tragic event: a young woman was savagely attacked by a neighbor’s dog when walking outside of her house. She had no health insurance, and because the neighbor had no mortgage on the house, there was no property or liability insurance in place. We were approached by bill sponsor Sen. Michael Jackson, who introduced the bill simply to raise awareness of this situation. While the bill did not pass, we have offered to work with Sen. Jackson should he address this issue again in a future legislative session.

DELAWARE

The Delaware General Assembly finished the first year of its two-year legislative session on June 30. Although the second half of the regular session will not start until January 2022, lawmakers will need to reconvene for a rare special session this fall to deal with redistricting and to vote on new legislative maps.

During this first half of the legislative session, lawmakers passed a number of insurance-related bills that are ready for action by Gov. Carney:

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SB 40, sponsored by Sen. Darius Brown (D – Senate District 2), permits the court to suspend all or part of the fine for uninsured driving if the defendant provides evidence that they have secured insurance between the date of the fine and the date of the sentencing. IA&B expressed concern to lawmakers that the unintended consequence of this bill may be to increase incidences of uninsured driving, as some drivers will risk waiting to secure coverage until they are charged.

Lawmakers also passed a bill establishing a peer-topeer car sharing program. SB 168, sponsored by Senate Majority Whip Elizabeth Lockman (D-Senate District 3), sets up a regulatory framework that allows for companies (e.g. Turo, Getaround) to facilitate the shared use of vehicles in Delaware. The bill establishes minimum insurance coverage requirements and requires the sharing companies to assume liability for damages during car sharing periods.

PROPERTY

SB 80, sponsored by Sen. Spiros Mantzavinos (D-Senate District 7), is a Department of Insurance (DOI) priority, which addresses the issue of “storm chasers” by authorizing a property insurance carrier to limit a policy’s assignability only to those persons or entities which have the legal authority to represent an insured. IA&B supports this legislation.

Another DOI-backed piece of legislation passed by lawmakers this session was SB 79, also sponsored by Sen. Mantzavinos. This legislation requires property insurers to provide 30 days’ written notice for policy cancellations except in the instance of nonpayment, when it is 10 days.

WORKERS’ COMPENSATION

SB 123, sponsored by Sen. Nicole Poore (D-Senate District 12), expands the scope of the workers’ compensation death benefit to surviving spouses who remarry. The insurance industry, including IA&B, expressed concerns about this legislation, which will make Delaware an outlier among other states in its handling of workers’ compensation death benefits.

The information in this article was current as of July 21, 2021. The legislative process is fluid, so watch IA&B Agent Headlines e-newsletter for updates on bills that could impact your agency and your insureds.

Lauren Brinjac is government affairs director for IA&B. For more information about any of the legislative issues mentioned here or to get involved, contact Lauren Brinjac at 800-998-9644, ext. 607 or LaurenB@IABforME.com.